Tax deal extends grants for green power plants

Energy

WASHINGTON, DC - DECEMBER 17: (AFP OUT) US President Barack Obama signs the middle-class tax cut bill in the South Court Auditorium December 17, 2010 in Washington, DC. The measure would extend tax cuts for families at every income level, renew jobless benefits for the long-term unemployed and enact a new one-year cut in Social Security taxes that would benefit nearly every worker who earns a wage. less

WASHINGTON, DC - DECEMBER 17: (AFP OUT) US President Barack Obama signs the middle-class tax cut bill in the South Court Auditorium December 17, 2010 in Washington, DC. The measure would extend tax cuts for ... more

Photo: Pool, Getty Images

Photo: Pool, Getty Images

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WASHINGTON, DC - DECEMBER 17: (AFP OUT) US President Barack Obama signs the middle-class tax cut bill in the South Court Auditorium December 17, 2010 in Washington, DC. The measure would extend tax cuts for families at every income level, renew jobless benefits for the long-term unemployed and enact a new one-year cut in Social Security taxes that would benefit nearly every worker who earns a wage. less

WASHINGTON, DC - DECEMBER 17: (AFP OUT) US President Barack Obama signs the middle-class tax cut bill in the South Court Auditorium December 17, 2010 in Washington, DC. The measure would extend tax cuts for ... more

Photo: Pool, Getty Images

Tax deal extends grants for green power plants

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President Obama's tax-break package, signed into law on Friday, contains a boost for renewable-power companies that the industry desperately sought all year.

The law extends through 2011 a program that gives builders of renewable-power plants a grant worth 30 percent of each plant's total cost, in lieu of taking a tax credit of equal value. Developers of wind farms, solar plants and geothermal facilities considered the public grants essential for persuading private financiers to back their projects.

Created as part of Obama's $787 billion economic stimulus in 2009, the grant program was set to expire at the end of this month. Only projects that started construction by Dec. 31 would qualify.

The deadline set off a frenzy of activity among developers. But many weren't able to get the necessary government permits for their projects in time. Now they have another year.

"This is a great day for America's solar industry," said Rhone Resch, president of the Solar Energy Industries Association, who attended the tax law's signing ceremony. "With the extension of the (grant) program now in place, the solar industry can continue its record growth, creating career opportunities for Americans in all 50 states in 2011."

The grants have played a key role in developing California's renewable power industry.

State officials raced to approve nine large solar thermal power plants - capable of generating up to 4,143 megawatts of electricity - in time to meet the deadline. A spate of photovoltaic solar plants and wind farms, capable of generating 6,434 megawatts, are still seeking federal financing in California. A megawatt is a snapshot figure, roughly equal to the amount of electricity used by 750 typical homes at any given moment.